This week Chancellor Phillip Hammond released his Autumn statement outlining the government’s spending plans for the coming four years. But how will this affect working families?
1. You’ll see an increase in your pay if you’re on NLW or NMW
The National Living Wage (NLW) and the National Minimum Wage (NMW) are set to increase from April 2017, so if you’re over 25, on the NLW and working full time you could see an additional £585 per year in your pay*.
These are the changes per age group:
2. Your Personal Allowance is increasing
- In April 2017 the personal allowance will rise to £11,500 – giving you an extra £500 tax-free – with a commitment from the government to increase this to £12,500 by 2020-21.
- The point at which you pay the higher rate of income tax will increase – from £43,000 this year to £45,000 in 2017-18 – with a commitment to increase the threshold to £50,000 by 2020-21. This is good news if you take childcare vouchers and your salary is between these amounts, as you’ll be able to increase your childcare voucher allowance from £124 per month (the higher rate allowance) to £243 per month (the basic rate allowance) without a change to your salary.
3. Salary Sacrifice schemes are changing
From April 2017, most salary sacrifice schemes will be subject to the same tax as cash income. There are a few very important exceptions though, including childcare vouchers, pensions, cycle-to-work schemes and ultra-low emission cars, so it’s worth speaking to your HR department about how you can make the most of these schemes.
4. Fuel duty will remain the same
This is for a seventh year in a row, saving the average motorist £130 per year.
For more information about the Autumn Statement take a look at the Gov.UK website
* Based on 37.5 hours per week at an increase of 30p per hour.